NJ's solar energy market shows continued strength

New Jersey’s solar energy market showed continued strength through the second quarter this year, with 75 megawatts worth of capacity added – nearly identical to what was added in the first quarter.

The state’s second-quarter installations trailed only California and Arizona, according to data compiled for the Solar Energy Industries Association.

In addition, the price for solar credits looks to have finally stabilized after a steep decline over the past 12 months. Solar Renewable Energy Credits, or SRECs, are credits earned by residential and commercial owners of solar panels. The credits can be sold to energy companies that are required by the state to generate a certain amount of their electricity through solar.

The price of solar credits, which had been as high as $309 per megawatt hour last September, had dropped steadily over the past 12 months, to a low of $184.28 in June. Then, in July, the price ticked up slightly to $184.41.

In the past, energy providers such as PSE&G purchased credits from solar producers to meet their state quotas without building their own solar installations.

But then utilities started to produce more of their own solar generation, driving the price for solar credits down.

Last summer, Governor Christie signed a Democrat-backed bill designed to stabilize the solar credit market by requiring utility companies to increase the percentage of power derived from solar.

The credits are often seen as an incentive for homeowners and businesses to install solar systems, since they can recoup some of the cost by selling the credits.

HoJae Lee, owner of SuperGreen Solutions in Englewood, which sells and installs solar arrays, said that, while last year’s legislation “hasn’t had much effect thus far,” he hopes the credit prices have bottomed out. “Hopefully, now it will start to increase again.”

New Jersey remains one of the strongest states in solar energy installations. It ranked second in new solar capacity in 2011 and was third in 2012. Through the end of last year, New Jersey’s 956 megawatts only trailed California’s 2,559 and Arizona’s 1,106, according to data compiled by the Interstate Renewable Energy Council. On a per capita basis, the state ranks fourth, behind Arizona, Hawaii and Nevada.

On Thursday, Environment New Jersey issued a report noting that New Jersey and 11 other leading solar states have been successful not because of geography, but because of policies put in place to help drive the solar industry.

But Doug O’Malley, Environment New Jersey’s director, said the state must continue to invest in solar power. “The legislature helped stabilize the market, but we don’t want to be content with our state’s solar capacity to plateau,” he said. “And we don’t want the market success to look like a bell curve.”

He reiterated an often-voiced criticism among environmentalists that Governor Christie has taken more than $850 million over the past several years earmarked for clean energy programs and instead used it to balance the state budget.

The administration has argued that the program never uses all the money in the fund, and the administration has merely taken the surplus. The money is raised through fees on electric and gas customers. Former Gov. Jon Corzine also took $10 million in clean energy funds to help balance the budget in each of his last two years in office.

Lyle Rawlings, president of Advanced Solar Products in Flemington, said the legislation passed last year to help stabilize the solar credit market will only postpone a weakening of the solar market in New Jersey unless the state takes action.

Rawlings said that New Jersey’s peak month of solar installation was January of 2012, when 85 megawatts were added. The lowest was last month, when only 8 megawatts were added.

Rawlings said that because of the long-term outlook of New Jersey’s solar market, he has reduced his New Jersey staff by 25 percent – eight positions – over the last year while increasing staff in states such as New York and Massachusetts, where he thinks state policies will help grow solar demand.